I am doing this firsthand.

There are 32.2 million global COVID-19 cases, as of September 25th 2020.

Brazil has 4.657 million cases. With a total population of 211 million, that is a ~2.2% infection rate.

7.0 million (21.7%) COVID-19 cases were reported in the USA. With a USA population of 328 million, that is a ~2.1% infection rate.

There are 983K global deaths. 203K (20.6%) of those are in the USA.

I came back to the USA from Costa Rica on March 2nd. That country shut its borders beginning March 18th. There are now roughly 70K cases there. This makes up ~1.4% of their 5.0 million population.

Sweden counts 90K cases Putting its total population of 10.2 million into play, that is an infection rate of ~0.9%.

There has been lots written on both left and right about these facts, and what central Federal or State policies work better or worse.

After this review, it strikes me.

Smaller countries, less densely populated countries, are having an easier time of it. Just arguing from population infection rates alone, I can make that argument hold water.

It is really just about effectively staying away from other people.

But policy CAN do something very material. The fact that Mainland China — where this pandemic started — is not even close to any of these infection rates, needs to be noted and discussed.

The Chinese Government, operating in a very densely populated country, did a number of things very spot-on there.

Raging at that government must be the dead wrong answer. The USA and Brazil governments should have been closely cooperating with the Chinese government instead.

Look back in retrospective fashion. The U.S.-China trade war gets a harsh summary judgment, too.

The world’s major governments and their stricken populations would have surely saved TRILLIONS of dollars, following up from close Chinese cooperation and the COVID-19 health policy learning done there.

II. Plague, and the Fall of the Mongolian Empire

Using the longer lens of history, we know about the Mongolian Empire story…

By the time of Kublai Khan's death in 1294, the Mongol Empire had fractured into four separate empires, or khanates.

In 1335, the Il-Khan (Mongol) ruler of Persia and the Middle East, Abu Said, died of bubonic plague during a war with his northern cousins, the Golden Horde. This signaled the beginning of the end for Mongol rule in the region. An estimated 30% of Persia's people died of the plague in the mid-14th century.
 

• The Ilkhanate (centered on Persia) disintegrated in the period 1335–1353
• This weakness allowed the Han Chinese Ming Dynasty to take control in 1368
• Russian princes also slowly developed independence over the 14th and 15th centuries, and the Mongol Empire finally dissolved there, too
• The Golden Horde had broken into competing khanates by the end of the 15th century and was defeated and thrown out of Russia in 1480 by the Grand Duchy of Moscow
• The Chagatai Khanate (today mostly Uzbekistan, southern Kazakhstan and western Tajikistan) lasted in one form or another until 1687

So, I conclude a few things.

(A) This COVID-19 pandemic is tied to humans interacting with animals in a Chinese wet market. That is a direct tie-in to those Mongol Empire times.

(B) Dissolving cooperation — decades in advance of the spread of bubonic plague — also hindered a pandemic response among the fighting factions across the Mongol empires.

The Spanish Flu of 1918 and the plague experience during the Mongolian empire time also shared one key similarity. The plague disease spread got stimulated by moving armies around, and housing them. Today, that is not happening. That is a positive.

Getting international political cooperation back on track is a key.

(C) Comparable COVID-19 infection and death rates are much, much lower.  

The Mongolian experience was orders of magnitude worse, particularly in terms of deaths.

(D) A COVID-19 vaccine is surely on the way, in a time span of months.

The Mongolian empire had no hope for a cure.

The most popular theory of how the plague ended is through the implementation of quarantines. The uninfected would typically remain in their homes and only leave when it was necessary. Those who could afford to do so would leave the more densely populated areas and live in greater isolation.

Effective ‘plague’ treatment with antiserum was initiated in 1896. This therapy was supplanted by sulphonamides in the 1930s and by streptomycin starting in 1947.

In modern times, with respect to COVID-19, there is science and medicine.

Murkily supported or hindered by their home government’s action or inactions, virus scientists are cooperating globally.

But the arrival of that vaccine, in significant quantities, looks further off than you might hope for.

According to Goldman Sachs on Sept. 25th--???

“The ‘super-forecasters’ in the Good Judgment Project now see a 53% probability that 25 million doses of an FDA-approved vaccine will be available by March 2021 (versus 69% two weeks ago).”

III. 11 COVID-19 Treatment and Vaccine Stocks

There are indeed a number of COVID-19 vaccines out there.

A crazy number, in fact.

For publicly traded companies, I found this Sept. 22nd vintage vaccine timeline from Bernstein helpful--

Next, a brief discussion of major stocks involved in this, or other treatments.

The COVID-19 sponsor companies are either in the Zacks Large Cap Pharma industry, or in Zacks Biomedical and Genetics industry.

I have listed shares in order of relevance to marketing COVID-19 products—

1. Gilead (GILD): Maker of Remdesivir (arguably the most promising treatment for COVID-19).

The stock price peaked at $84 in mid-April, amidst the quarantine frenzy.
More recently, the shares have gone down from $78 in mid-July to $62 now.

The shares pay a 4.4% annual dividend.

The Zacks Value score is A and Zacks Growth score is B.

It is currently a Zacks #3 Rank (Hold).

Biomedical and Genetics industry stocks are currently ranked #192 out of 251 (Bottom 24%). But we are in front of an earnings reporting season. Take that with a grain of salt.

2. Pfizer (PFE): At the top of the Bernstein list. Earliest vaccine approval is Q2-2021.  Shares reached $38 in May. They trade at $36 now.

The shares pay a 4.2% annual dividend.

The Zacks Value score is B and Zacks Growth score is D.

It is currently a Zacks #3 Rank (Hold).

Large Cap Pharma industry stocks are currently ranked #122 out of 251 (Top 49%). Again, we are in front of an earnings reporting season. Take that with a grain of salt.

3. Moderna (MRNA): Another Q2-2021 vaccine player. Market cap is a stunning $27 billion now. That is one market indicator of how valuable a COVID-19 vaccine may be.

However, this company does have 23 mRNA investigational candidates, with 13 candidates in clinical development stages.

mRNA is their focus.

Share prices spiked to over $90 in mid-July. They trade at $70 now. It is a worth momentum trading vaccine stock, according to the share price chart.

The shares pay no annual dividend.

The Zacks Value score is F and Zacks Growth score is D.

It is currently a Zacks #3 Rank (Hold).

Biomedical and Genetics industry stocks are currently ranked #192 out of 251 (Bottom 24%). But we are in front of an earnings reporting season. Take that with a grain of salt.

4. Johnson & Johnson (JNJ): They are working with Emergent. The COVID-19 candidate is a mid-2021 player.

Share prices topped at $155 in late April. They trade at $147 now. A tight range-trading beast.

The shares pay a 2.75% annual dividend.

The Zacks Value score is B and Zacks Growth score is C.

It is currently a Zacks #4 Rank (Sell). They report on Oct. 13th. That ranking goes stale in front of an EPS report.

Large Cap Pharma industry stocks are currently ranked #122 out of 251 (Top 49%). Again, we are in front of an earnings reporting season. Take that with a grain of salt.

5. Astra Zeneca (AZN): Our first non-U.S. stock on the Bernstein list. Working with Oxford University in the U.K. Mid-2021 is when that team could deliver a COVID-19 vaccine.

Share prices topped at a short, spike-y $60 in mid-July. They trade at $55 now. This is another tight range-trading Large Cap Pharma beast. $144B market cap with a low 0.50 stock market beta.

The shares pay a 1.60% annual dividend.

The Zacks Value score is C and Zacks Growth score is B.

It is currently a Zacks #3 Rank (Hold). They report on Oct. 22nd. That ranking goes stale in front of an EPS report.

Large Cap Pharma industry stocks are currently ranked #122 out of 251 (Top 49%). Again, we are in front of an earnings reporting season. Take that with a grain of salt.
 

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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

???I am doing this firsthand.

There are 32.2 million global COVID-19 cases, as of September 25th 2020.

Brazil has 4.657 million cases. With a total population of 211 million, that is a ~2.2% infection rate.

7.0 million (21.7%) COVID-19 cases were reported in the USA. With a USA population of 328 million, that is a ~2.1% infection rate.

There are 983K global deaths. 203K (20.6%) of those are in the USA.

I came back to the USA from Costa Rica on March 2nd. That country shut its borders beginning March 18th. There are now roughly 70K cases there. This makes up ~1.4% of their 5.0 million population.

Sweden counts 90K cases Putting its total population of 10.2 million into play, that is an infection rate of ~0.9%.

There has been lots written on both left and right about these facts, and what central Federal or State policies work better or worse.

After this review, it strikes me.

Smaller countries, less densely populated countries, are having an easier time of it. Just arguing from population infection rates alone, I can make that argument hold water.

It is really just about effectively staying away from other people.

But policy CAN do something very material. The fact that Mainland China — where this pandemic started — is not even close to any of these infection rates, needs to be noted and discussed.

The Chinese Government, operating in a very densely populated country, did a number of things very spot-on there.

Raging at that government must be the dead wrong answer. The USA and Brazil governments should have been closely cooperating with the Chinese government instead.

Look back in retrospective fashion. The U.S.-China trade war gets a harsh summary judgment, too.

The world’s major governments and their stricken populations would have surely saved TRILLIONS of dollars, following up from close Chinese cooperation and the COVID-19 health policy learning done there.

II. Plague, and the Fall of the Mongolian Empire

Using the longer lens of history, we know about the Mongolian Empire story…

By the time of Kublai Khan's death in 1294, the Mongol Empire had fractured into four separate empires, or khanates.

In 1335, the Il-Khan (Mongol) ruler of Persia and the Middle East, Abu Said, died of bubonic plague during a war with his northern cousins, the Golden Horde. This signaled the beginning of the end for Mongol rule in the region. An estimated 30% of Persia's people died of the plague in the mid-14th century.
 

• The Ilkhanate (centered on Persia) disintegrated in the period 1335–1353
• This weakness allowed the Han Chinese Ming Dynasty to take control in 1368
• Russian princes also slowly developed independence over the 14th and 15th centuries, and the Mongol Empire finally dissolved there, too
• The Golden Horde had broken into competing khanates by the end of the 15th century and was defeated and thrown out of Russia in 1480 by the Grand Duchy of Moscow
• The Chagatai Khanate (today mostly Uzbekistan, southern Kazakhstan and western Tajikistan) lasted in one form or another until 1687

So, I conclude a few things.

(A) This COVID-19 pandemic is tied to humans interacting with animals in a Chinese wet market. That is a direct tie-in to those Mongol Empire times.

(B) Dissolving cooperation — decades in advance of the spread of bubonic plague — also hindered a pandemic response among the fighting factions across the Mongol empires.

The Spanish Flu of 1918 and the plague experience during the Mongolian empire time also shared one key similarity. The plague disease spread got stimulated by moving armies around, and housing them. Today, that is not happening. That is a positive.

Getting international political cooperation back on track is a key.

(C) Comparable COVID-19 infection and death rates are much, much lower.  

The Mongolian experience was orders of magnitude worse, particularly in terms of deaths.

(D) A COVID-19 vaccine is surely on the way, in a time span of months.

The Mongolian empire had no hope for a cure.

The most popular theory of how the plague ended is through the implementation of quarantines. The uninfected would typically remain in their homes and only leave when it was necessary. Those who could afford to do so would leave the more densely populated areas and live in greater isolation.

Effective ‘plague’ treatment with antiserum was initiated in 1896. This therapy was supplanted by sulphonamides in the 1930s and by streptomycin starting in 1947.

In modern times, with respect to COVID-19, there is science and medicine.

Murkily supported or hindered by their home government’s action or inactions, virus scientists are cooperating globally.

But the arrival of that vaccine, in significant quantities, looks further off than you might hope for.

According to Goldman Sachs on Sept. 25th--???

“The ‘super-forecasters’ in the Good Judgment Project now see a 53% probability that 25 million doses of an FDA-approved vaccine will be available by March 2021 (versus 69% two weeks ago).”

III. 11 COVID-19 Treatment and Vaccine Stocks

There are indeed a number of COVID-19 vaccines out there.

A crazy number, in fact.

For publicly traded companies, I found this Sept. 22nd vintage vaccine timeline from Bernstein helpful--

Next, a brief discussion of major stocks involved in this, or other treatments.

The COVID-19 sponsor companies are either in the Zacks Large Cap Pharma industry, or in Zacks Biomedical and Genetics industry.

I have listed shares in order of relevance to marketing COVID-19 products—

1. Gilead (GILD): Maker of Remdesivir (arguably the most promising treatment for COVID-19).

The stock price peaked at $84 in mid-April, amidst the quarantine frenzy.
More recently, the shares have gone down from $78 in mid-July to $62 now.

The shares pay a 4.4% annual dividend.

The Zacks Value score is A and Zacks Growth score is B.

It is currently a Zacks #3 Rank (Hold).

Biomedical and Genetics industry stocks are currently ranked #192 out of 251 (Bottom 24%). But we are in front of an earnings reporting season. Take that with a grain of salt.

2. Pfizer (PFE): At the top of the Bernstein list. Earliest vaccine approval is Q2-2021.  Shares reached $38 in May. They trade at $36 now.

The shares pay a 4.2% annual dividend.

The Zacks Value score is B and Zacks Growth score is D.

It is currently a Zacks #3 Rank (Hold).

Large Cap Pharma industry stocks are currently ranked #122 out of 251 (Top 49%). Again, we are in front of an earnings reporting season. Take that with a grain of salt.

3. Moderna (MRNA): Another Q2-2021 vaccine player. Market cap is a stunning $27 billion now. That is one market indicator of how valuable a COVID-19 vaccine may be.

However, this company does have 23 mRNA investigational candidates, with 13 candidates in clinical development stages.

mRNA is their focus.

Share prices spiked to over $90 in mid-July. They trade at $70 now. It is a worth momentum trading vaccine stock, according to the share price chart.

The shares pay no annual dividend.

The Zacks Value score is F and Zacks Growth score is D.

It is currently a Zacks #3 Rank (Hold).

Biomedical and Genetics industry stocks are currently ranked #192 out of 251 (Bottom 24%). But we are in front of an earnings reporting season. Take that with a grain of salt.

4. Johnson & Johnson (JNJ): They are working with Emergent. The COVID-19 candidate is a mid-2021 player.

Share prices topped at $155 in late April. They trade at $147 now. A tight range-trading beast.

The shares pay a 2.75% annual dividend.

The Zacks Value score is B and Zacks Growth score is C.

It is currently a Zacks #4 Rank (Sell). They report on Oct. 13th. That ranking goes stale in front of an EPS report.

Large Cap Pharma industry stocks are currently ranked #122 out of 251 (Top 49%). Again, we are in front of an earnings reporting season. Take that with a grain of salt.

5. Astra Zeneca (AZN): Our first non-U.S. stock on the Bernstein list. Working with Oxford University in the U.K. Mid-2021 is when that team could deliver a COVID-19 vaccine.

Share prices topped at a short, spike-y $60 in mid-July. They trade at $55 now. This is another tight range-trading Large Cap Pharma beast. $144B market cap with a low 0.50 stock market beta.

The shares pay a 1.60% annual dividend.

The Zacks Value score is C and Zacks Growth score is B.

It is currently a Zacks #3 Rank (Hold). They report on Oct. 22nd. That ranking goes stale in front of an EPS report.

Large Cap Pharma industry stocks are currently ranked #122 out of 251 (Top 49%). Again, we are in front of an earnings reporting season. Take that with a grain of salt.
 

The Hottest Tech Mega-Trend of All

Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>

At every time interval, this industry niche of the Consumer Discretionary sector widely beats the S&P 500 index.

In fact, this industry’s share returns are up over 6X the S&P 500 the last three months.

If those outperforming returns don’t scream “COVID-19 play,” what does?

However, inspect specific share stories – closely – to see what is going on.

Three Top Zacks #1 Rank (STRONG BUY) Stocks

I am only going to discuss top names — with big market capitalizations.

(1) Pool Corp. (POOL)

This is a $12.5B market cap stock with a whopping $307 share price now.

Based on the Zacks Price and Consensus chart, I wouldn’t get in now. Wait for a pullback. The recent share price run-up is worrisome.

The Zacks Value score is D (with a nosebleed forward P/E ratio of 48.2), the Zacks Growth score is A, and the Zacks Momentum score is C. That’s an overall VGM score of B.

Current year EPS is $6.52 a share.

Based in Covington, LA, Pool Corp. is the world's largest wholesale distributor of swimming pool supplies, equipment and related products.

In addition, the company is a leading regional wholesale distributor of irrigation and landscape products.

The company was incorporated in the State of Delaware in 1993 and grew from a regional distributor to a multi-national, multi-network distribution company.

(2) Yeti Holdings (YETI)

This is a $4.1B market cap stock with a $47 share price now.

Based on the Zacks Price and Consensus chart, I wouldn’t get in now. Wait for a pullback. Once again, the recent share price run-up is worrisome. The COVID-19 momentum traders were all over this stock.

The Zacks Value score is F (another nosebleed forward P/E ratio of 45.0), the Zacks Growth score is D, and the Zacks Momentum score is C. That’s an overall VGM score of F.

Current year EPS is $1.04 a share.

Yeti Holdings, Inc. designs, markets and distributes products for the outdoor and recreation market under YETI brand primarily in the United States.

The company's products are designed for use in outdoor activities, including recreational and professional pursuits targeting various categories, including hunting, fishing, camping, barbecue, farm and ranch activities and others.

Yeti Holdings, Inc. is headquartered in Austin, Texas.

(3) Brunswick (BC)

This is a $5.7B market cap stock with a $72 share price now.

Based on the Zacks Price and Consensus chart, this stock is the more fairly priced of the three. The share price was destroyed during the mid-March shutdowns, but it has since recovered to its prior levels.

The Zacks Value score is D (but the forward P/E ratio is much lower at 24.6), the Zacks Growth score is D (which may vastly improve after the July 30th EPS report), and the Zacks Momentum score is F. That’s an overall VGM score of F.

Current year EPS is $2.94 a share.

Brunswick Corporation endeavors to instill Genuine Ingenuity in all its leading consumer brands, including:
 

• Mercury and Mariner outboard engines
• Mercury MerCruiser sterndrives and inboard engines
• MotorGuide trolling motors
• Attwood and Whale marine parts and accessories
• Land 'N' Sea, Kellogg Marine, Diversified Marine, BLA and Bell RPG parts and accessories distributors
• Bayliner, Boston Whaler, Brunswick Commercial and Government Products, Crestliner, Cypress Cay, Harris, Lowe, Lund, Meridian, Princecraft, Quicksilver, Rayglass, Sea Ray and Uttern boats
• Life Fitness, Hammer Strength and SCIFIT fitness equipment
• Brunswick billiards tables, accessories and game room furniture and InMovement products and services for productive well-being

Conclusion

This Leisure & Recreation industry narrative shows you. Stock market traders have already been betting the summer outdoor crowd would be bigger than normal this year.

Shutdown-crazed folks were expected to pick up their spending on outdoor goods.

My closing stock picking advice?

This is one industry to pick your way through, very carefully. Trend chasing COVID19 profiteers lurk behind big momentum share price runs. Any time now, they can start mass-selling the POOL and YETI names in this giddy stock market.

So, play it safe when trading in the COVID-19 environment.

Regards,

John Blank

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• The forward P/E ratio is quite low at 6.53. The market beta is 1.28.
• There is a very substantial dividend of $1.81 a year (10.09% annually).

Fortescue Metals Group Ltd. is engaged in the exploration and mining of Iron Ore properties. Its properties primarily include the Cloudbreak and Christmas Creek mine sites and the Solomon project located in Pilbara, Western Australia.

Fortescue Metals Group is based in East Perth, Australia.

The stock has been on a momentum run since 2019, when shares priced at just $6 each. You can’t easily beat that 10% dividend, either.

(2) Vale SA (VALE): At the moment, this stock is a Zacks #3 Rank (HOLD). This name has a much bigger $46.05B market cap at a lower $9.11 a share price. In 2019, this stock was trading north of $14 a share. In pre-pandemic 2020, it was $13 a share.
 

• I see a Zacks Value score of A and a Zacks Growth score of D.
• The forward P/E ratio is low at 9.05. The market beta is 1.02.
• There is a very substantial dividend of $0.59 a year (6.57% annually).

Brazil-based Vale S.A. is one of the world’s largest mining companies. It is the world’s largest producer of Iron Ore, Iron Ore Pellets and nickel. It also produces manganese ore, ferroalloys, metallurgical and thermal coal, copper, platinum group metals (PGMs), gold, silver and cobalt.

Vale has a logistics network integrating mines, railroads, ports and ships, which has provided it an edge in the Iron Ore market. The company has through the years distributed its products to various countries.

Brazil is a commodity-rich country in a deep struggle with this pandemic. The currency (the Brazilian real) has been driven lower and lower. Its neighbor Argentina is belly up.

To wrap this short piece up, what top-down silver lining is seen here?

Not much appeared immediately. After putting this piece together, I thought again.

There is the rising Zacks Industry Rank, very tasty annual dividend yields for the patient investor, and the potential for mainland China’s economy to keep picking up under the usual centrally-planned stimulus. The world’s manufacturer always seeks to do fixed asset infrastructure investments to lift its internal economy up.

In that vein, a stock from the Material Sector and more specifically, the Iron Ore sector, shapes up to be an interesting contrarian investing opportunity.

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I see a #50 Zacks Industry rank out of 255 groups (Top 20%) in late January 2020. Over the past 8 weeks, this ranking was no lower than #92. This score has been as high as #25 (Top 10%).

Why is that?

Covering analysts caught a data surprise. According to a report from the U.S. Commerce Department, construction of new U.S. homes reached its highest level in 13 years in December 2019.

Warm weather was a key assist. Sometimes, “hot” really does mean hot. But that latest monthly spike also captures more enduring strength in the U.S. housing market. Attribute this deeper strength to low mortgage rates, cash made available from new records in stock markets, a solid U.S. jobs market and resilient consumer confidence.

Let’s confirm a long-term home construction boom with private sector data. Use the latest National Association of Home Builders (NAHB) annual forecasts for housing starts.

Do one quick scan. Private sector starts data (below) maps out a similar bullish story.

Underlying business fundamentals for home construction were indeed improving from 2017 to 2019. In fact, this U.S. home construction boom should have legs across 2020, going all the way to the end of 2021.

• Internal studies have shown Zacks’ best stock pickers. Roughly half of a stock's price movement can be attributed to a stock's industry group.
• In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1.

By focusing on top stocks within the top 50% of Zacks Ranked Industries, you can dramatically improve your stock picking success.

Finally, is it true? Did a fundamentally strong Building-Products Retail industry deliver outperforming share returns?

YES.

Consult the table of share returns below. This industry outperformed the broad S&P 500 index at EVERY time interval, from 1 month all the way out to 5 years.

Next, I provide relevant investing details on the top three stocks in the group.

I ordered them by market capitalization, from the largest company to the smallest.

(1) Lowe’s Companies (LOW): This is a Zacks #2 Rank (BUY) stock with a share price of $121. In early 2019, this was a $90 stock. At these prices, I see the market cap is $92.9B. The forward P/E is 21.26. The stock market beta is above average at 1.28.

• There is a Zacks Value score of B and a Zacks Growth score of A.
• The average of the last 4 earnings surprises is +0.9%.

Lowe’s Companies is one of the leading home improvement retailers, which has its operations primarily in the U.S. and Canada. The company offers services to homeowners, renters and commercial business customers.

Homeowners and renters principally include do-it-yourself (DIY) customers and do-it-for-me (DIFM) customers who utilize the company’s installed sales programs.

Commercial business customers consist of those who work in the construction, repair/remodel, commercial and residential property management, and business maintenance professions.

This large company is based in Mooresville, NC and was incorporated in 1952.

(2) Builders FirstSource (BLDR): This is a Zacks #1 Rank (STRONG BUY) stock with a share price of $27. In early 2019, this was just a $12 stock. At these elevated prices, I see the market cap is $3.1B. However, the forward P/E still looks good at 12.14. The stock market beta is high at 1.90.

There is a Zacks Value score of B and a Zacks Growth score of A.
The average of the last 4 earnings surprises is a whopping +28.2%.

Builders FirstSource is a leading supplier and manufacturer of structural and related building products for residential new construction in the United States.

Manufacturing facilities include plants that manufacture roof and floor trusses, wall panels, stairs, aluminum and vinyl windows, custom millwork and pre-hung doors.

Builders FirstSource also distributes windows, interior and exterior doors, dimensional lumber and lumber sheet goods, millwork and other building products.

The midsized company is headquartered in Dallas, Texas and was founded in 1998.

(3) BMC Stock Holdings (BMCH): This is a Zacks #2 Rank (BUY) stock with a share price of $31. In early 2019, this was just a $16 stock. At these elevated prices, I see the market cap is $2.1B. However, the Forward P/E still looks good at 15.28. In this case, the stock market beta is low at 0.90.

• There is a Zacks Value score of A and a Zacks Growth score of A.
• The average of the last 4 earnings surprises is a whopping +29.3%.

BMC Stock Holdings provides diversified building products and services to professional builders and contractors, primarily in the residential housing market.

The company's portfolio of products and services spans building materials includes millwork and structural component manufacturing capabilities, consultative showrooms and design centers, value-added installation management and an eBusiness platform.

BMC Stock Holdings, formerly known as Stock Building Supply Holdings, is headquartered in Raleigh, North Carolina. It is the smallest of the three companies.

That’s all I have for this hot industry, whose top stocks are still not overvalued.

I wish upon all of you a happy investing experience.

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Want one of the most interesting tidbits, with salient investor insight into 2020?

• This CIO group thinks large-cap stocks (above $5B in market capitalization) likely add something between 0% and 5% to your returns
• At the other end of the market cap spectrum, small-cap stocks (those below $1B in market cap) likely deliver 0% to 5% returns
• However, CIOs collectively felt there is one niche to mine for outperforming 5% to 10% returns next year

This is a market blind spot: the market cap gap between the two -- the so-called mid-cap stocks. These are firms valued at between $1 and $5B in market capitalization.

In general, you know the quality tickers and company names of large-cap stocks. There is a comfort there. Small caps stock groups (like Computer Software) have sexier start-up names and new business concepts. So, there is always investor interest in looking into small caps. They are the Home Run stocks. Or the biggest blowups.

In between are these boring companies. Each firm’s activities are tied to stock tickers generally overlooked by the crowd. But they can be very profitable.

In the Zacks Industry Ranks in December 2019, I found one classic example. It is the Miscellaneous Consumer Services industry. I counted 9 companies in it.

Earnings estimates here are on a tear. This overlooked stock niche has a Zacks Industry Rank of #19 out of 253 (Top 10%). Over the last 8 weeks of time, this ranking has never been lower than #49 (Top 20%).

Yes. Miscellaneous Consumer Services is a convoluted title. Yes. The group is NOT populated with sexy tickers. Yes. The business models are a grab bag of sensible but boring activities.

However, investors can make excellent money on these types of stocks next year, according to both CIOs and our Zacks Rank system. I will just leave it at that.

The top three names—

(1) Cimpress N.V. (CMPR): This 1^st pick is a $3.3B market cap stock with a $118 dollar price tag.

It is a Zacks #2 Rank (BUY). There is a Zacks Value score of C and a Zacks Growth score of A and a Zacks Momentum score of A.

Cimpress N.V. is an online supplier of high-quality graphic design services and customized printed products to small businesses and consumers.

Its product offerings include business cards, brochures and websites to invitations, thank you notes, calendars, address labels, note pads and signage, among others.

With the use of proprietary web-based design software and advanced computer integrated printing facilities, the company has a competitive advantage over traditional graphic design and printing methods.

It has production facilities in the United States, Austria, China, Brazil, Australia, Canada, India, France, Japan, Italy, the U.K., Ireland, Mexico and the Netherlands.

Cimpress was originally known as Vistaprint N.V. In second-quarter fiscal 2015 (ended December 2015), Vistaprint changed its corporate name to Cimpress N.V. and ticker symbol to CMPR.

The change in the corporate name was a conscious effort to distinguish the corporate entity and its technology and operational mass customization platform with the growing portfolio of customer-centric brands like Vistaprint, Drukwerkdeal, Albelli and Pixartprinting.

(2) H&R Block (HRB): This 2^nd pick has a market cap of $4.6B and a share price of $23.

It is a Zacks #1 Rank (STRONG BUY) stock. The Zacks Value score is A (with a forward P/E of 9.6) and a Zacks Growth score of D, and a Zacks Momentum score of A.

H&R Block Inc. is a leading provider of tax preparation services. The company provides assisted income tax return preparation, do-it-yourself (DIY) tax solutions and other products and services associated with income tax return preparation in the United States, Canada and Australia.

Assisted income tax return preparation services are provided through a system of retail offices operated directly by the company or by franchisees. DIY tax services include preparation of federal and state income tax returns, advice and tax-related news, access to tax tips, use of calculators for tax planning, and error checking and electronic filing.

The company develops and markets DIY income tax preparation software online, and through third-party retail stores and direct mail. The company offers return preparation solutions through mobile applications as well.

Additional offerings from the company include Refund Transfers, H&R Block Emerald Advance lines of credit, Peace of Mind Extended Service Plan, Tax Identity Shield, H&R Block Emerald Prepaid MasterCard, and refund advance loans; POM, an Instant Cash Back refund option; and H&R Block Pay with Refund option.

H&R Block was organized as a corporation in 1955 under the laws of the State of Missouri and is headquartered in Kansas City, MO. The company has around 11,600 company-owned and franchise offices worldwide.

As most of the clients file their tax returns from January through April of each year, most of H&R Block’s revenues from income tax return preparation and related services and products are received during this period. As a result, the Tax Services segment generally operates at a loss through the first nine months of a fiscal year.

(3) SP Plus (SP): This 3^rd and final pick has a market cap of $1.1B with a share price of $44.

It is a Zacks #1 Rank (STRONG BUY) stock. The Zacks Value score is B (with a forward P/E of 15.7) and a Zacks Growth score of A, and a Zacks Momentum score of D.

SP Plus provides professional parking, ground transportation, facility maintenance, security and event logistics services to property owners and managers in all markets of the real estate industry.

The company also provides a range of ancillary services, such as airport shuttle operations, taxi and livery dispatch services and municipal meter revenue collection and enforcement services. Its clients include owners of office building complexes, shopping centers, sports complexes, hotels, hospitals and various airports.

SP Plus, formerly known as Standard Parking Corporation, is based in United States.

Like I said, the three business models are NOT exciting. They make business cards, do income tax prep, and offer you a parking slot in a downtown garage.

Yet mid cap stocks may well be the top niche to make returns next year. 

If you think boring is boring, look at a Domino’s Pizza share price chart and get over it.

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• It is one of the largest warehouse club operators in the United States. 
• The company also operates e-commerce websites in the U.S., Canada, Mexico, U.K., Korea and Taiwan.

• A sister group of 30 companies is Zacks Internet Commerce. It is hot, too, at #57. A good company example here is Zacks #2 Ranked travel advisor TripAdvisor.
• A huge 91 company strong Zacks industry group is Internet Software. It is hot at #61. A good Zacks #1 Rank example here is online payments processor Square.

• Single Sign-On
• Mobility Management
• Adaptive Multi-Factor Authentication
• Lifecycle Management and
• Universal Directory

According to our Zacks Industry Rank system, the Laser Systems industry came in at #17 out of 256 industries we ranked on September 24^th, 2019.

Perhaps ‘sourcing inspiration from the sun’ is the appropriate language to use?

The Zacks Heat Map shows the red-hot glow picked up 6 weeks ago. In short, a few key companies in the small space delivered outsized earnings beats in the second quarter.

A month ago, when a number of August laser company earnings beats got picked up by our earnings estimate system, the Laser Systems industry catapulted from a middling spot at #110 to a very attractive pole position of #25 (top 10%).

British science writer Chris Woodford gives us the best online laser industry narrative –

“Lasers are amazing light beams powerful enough to zoom miles into the sky or cut through lumps of metal.

“Although they seem pretty recent inventions, they've actually been with us over half a century: the theory was figured out in 1958; the first practical laser was built in 1960.

“At that time, lasers were thrilling examples of cutting-edge science: secret agent 007, James Bond, was almost chopped in half by a laser beam in the 1964 film Goldfinger. But apart from Bond villains, no-one else had any idea what to do with lasers; famously, they were described as ‘a solution looking for a problem.’

“Today, we all have lasers in our homes (in CD and DVD players), in our offices (in laser printers), and in the stores where we shop (in barcode scanners).

“Our clothes are cut with lasers, we fix our eyesight with them, and we send and receive emails over the Internet with signals that lasers fire down fiber-optic cables.

“Whether we realize it or not, all of us use lasers all day long, but how many of us really understand what they are or how they work?

“The basic idea of a laser is simple. It's a tube that concentrates light over and over again until it emerges in a really powerful beam.”

I list three attractive Zacks Rank laser stocks, in order of market capitalization—

(1) Lumentum Holdings Inc. (LITE): This is a $58 dollar a share stock, with a market cap of $4.5 billion. This makes it the granddaddy mid-cap stock in the group of three.

Both the Zacks #2 (BUY) Rank and the Zacks Growth score of A are very attractive.

In fact, over the past month of August 2019, current quarter earnings estimates for LITE rose from $1.09 per share to $1.19 per share. In addition, current year 2019 earnings estimates rose from $4.45 per share to $4.54 per share.

The company manufactures a number of innovative optical and photonic products for the broader Info Tech sector ecosystem.

The company's two operating segments are Optical Communications and Commercial Lasers.

Optical Communications segment portfolio includes products used by Telecom and Datacom nanoelectromechanical systems and traditional as well as cloud/data center service providers.

Commercial Lasers segment products serve its customers in markets and applications, such as manufacturing, biotechnology, graphics and imaging, remote sensing and precision machining.

Lumentum Holdings Inc. is headquartered in Milpitas, California.

(2) Cutera Inc. (CUTR): This is a small-cap stock at a share price of $31 and a market cap of $437 million. It is currently a Zacks #2 Rank (BUY) stock.

Overall, Cutera had a great Q2. Revenue of $48 million beat our consensus estimate and rose +12% year-over-year, marking the highest sales level in the company’s history. Earnings of $0.04 per share easily beat the Zacks Consensus for a loss of 16 cents, with net income of $0.6 million.

The company saw strong growth internationally—revenue grew +36% year-over-year in its international segment—and nice gains across Japan, Europe and Asia all contributed to Cutera’s growth this past quarter.

As a result, CUTR shares shot up +34% after releasing its Q2 earnings in August.

This company focuses on laser applications for the Health Care sector. The company designs, develops, manufactures and markets the CoolGlide family of products for use in laser and other light-based aesthetic applications:

• The original CoolGlide CV provides permanent hair reduction on all skin types
• The second generation CoolGlide Excel incorporated features that added the capability to treat a variety of vascular lesions, which include facial telangiectasia, spider and reticular leg veins
• The CoolGlide Vantage added non-ablative skin therapy to the range of applications offered by the system

(3) Iridex Corp. (IRIX): This is a $1.57 share price stock. The 52-week high on the stock is $6.67 a share. Currently, the market cap is $28 million, making it a microcap. It is a Zacks #1 Rank (STRONG BUY) stock.

In its recent August 2019 earnings report, it came out with a loss of -$0.18 a share, versus the consensus estimate for -$0.22. This was also much better than the loss of -$0.28 a share a year ago.

The company is the leading worldwide provider of semiconductor-based laser systems used to treat eye diseases in ophthalmology and skin lesions in dermatology.

The products are sold in the United States predominantly through a direct sales force and internationally through independent distributors.

The company markets the products using three brand names:

• IRIS Medical to the ophthalmology market
• IRIDERM to the dermatology market, and
• Light Solutions to the research market

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Out on the horizon, though, much remains out of focus. Does this short-term trader play keep outperforming this fall? Or do profit-taking pirates secure their prize?

Across spring and summer, “tit-for-tat” tariff escalation was how share traders placed very lucrative bets. Seas were stormy. A self-created U.S. trade war with China kept global business uncertainty high. Safe haven fixed income ports got over-full.

This fall, a set of profit flags unfurl – deep into a share price momentum race.

Is the run over? Is profit-taking on the way? Or is another leg higher yet to come?

To recap, seven weeks ago – around early July – the latest Home Builder share price momentum race gained speed via a fundamental lowering of home financing costs.

• A rapid decline in risk-free long-term U.S. Treasury interest rates took down the 30-year fixed mortgage rate
• I see this large 19-company strong industry made it to #19 out of 256 Zacks industries in late August 2019
• That’s the Top 7%

Zacks serial heat map showed an earnings estimate tailwind enduring 7 straight weeks.

Home Builder share returns piled up.

• In 2019 (YTD), this mid cap share complex racked up a +34% share gain
• Meanwhile, the broad large cap S&P 500 index rose half as fast at +15%
• However, this is solely a recent share price momentum move
• This boom-or-bust industry underperformed the S&P 500 index over the last 3 and 5 years

The latest Home Builder Share Price 1-month, 3-month, YTD, and 1-year outperformance is shown in the table below. Ditto the early underperformance.

Want historic data that most attracts my economist mind? Long-term U.S. Treasury bond rates trade at lows seen in the “earnings recession” period of 2016.

My informed guess atop the Crow’s Nest?

Underlying home finance rates move sideways this fall. There isn’t much home finance upside left – for those late to the action.

Yet, aggressive share-trading bulls can bet on more trade war escalation. They could be right again. The trend is your friend.

This fall, I see both active buyers and sellers entering trades, inside this speculative share niche. There will be plenty of volume.

Looking down from above, I would fly over the industry fleet – and each individual risky cache of shares -- a “dangerous cargo” flag.

Home Builders is an industry packed with mid-cap names. Here are three of the best, according to the latest Zacks Ranks.

Three Zacks #1 Rank (STRONG BUY) Home Builder Stocks—

(1) KB Home (KBH): This is a $2.5B market cap stock with a $28 share price. The stock carries a Zacks Value score of A. The PEG ratio is 1.2.The beta is 1.4.

KB Home constructs and sells a variety of new homes designed primarily for first-time, move-up and active adult homebuyers, including

• attached and detached single-family residential homes
• townhomes and condominiums

They offer homes in development communities, at urban in-fill locations and as part of mixed-use projects. Their homebuilding operations represent most of their business.

Their financial services operations offer certain insurance products to their homebuyers and title services in certain markets.

(2) M.D.C. Holdings (MDC): This is a $2.3B market cap stock with a $37 share price. The stock carries a Zacks Value score of C. The PEG ratio is 1.25.The beta is 1.1.

M.D.C. Holdings, Inc. engages in homebuilding and financial service businesses in the United States.

It is engaged in the construction, sale and related financing of residential housing and the acquisition and development of land for use in the Denver, Phoenix, Maryland, Virginia, the mid-Atlantic region, Las Vegas, Dallas and California metropolitan areas.

MDC's homebuilding subsidiaries, which operate under the name Richmond American Homes, have built and financed the American Dream.

The company's subsidiaries also provide mortgage financing, insurance and title services.

(3) Meritage Homes Corp. (MTH): This is a $2.45B market cap stock with a $65 share price. The stock carries a Zacks Value score of B and a Zacks Growth score of B. The PEG ratio is 1.5.The beta is 1.07.

Meritage Homes is the eighth-largest public homebuilder in the United States.

Meritage Homes builds and sells single-family homes for first-time, move-up, luxury and active adult buyers across the Western, Southern and Southeastern United States.

Meritage Homes is the industry leader in energy-efficient homebuilding and has received the U.S. Environmental Protection Agency's ENERGY STAR Partner of the Year for Sustained Excellence Award every year for innovation and industry leadership in energy efficient homebuilding.

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